This dissertation suggests that the increase in the proportion of college graduates in the United States labor force in the 1970s may have been a causal factor in both the decline in the college premium during the 1970s and the large increase during the 1980s and the 1990s. I argue that the proportion of skilled workers in the labor force determines their relative importance in the political process. Thus, the increase in the proportion of skilled workers during the 1970s reduced skill premium in the short run, but induced a change in policies that increased the skill premium in the subsequent decades above its initial value. Also, this dissertation argues that in follower countries that rely on imitation, the demand for education is relatively low compared with countries that grow through innovation. As a result, given the level of technology, follower countries have lower level of education and because of that, voters elect relatively worse, for economic growth, policies. This provides a theoretical support for club convergence. More specifically, the model predicts that countries will sort themselves into three groups: those that grow through innovation, those that grow through imitation, and poor countries. Countries in the first two groups grow at the same rate. This paper explains, among others, why voters in the U.S. elect better, for economic growth, policies compared to the policies that European voters elect.
Pargianas, Christos,
"Endogenous Economic Institutions, Wage Inequality, and Economic Growth"
(2011).
Economics Theses and Dissertations.
Brown Digital Repository. Brown University Library.
https://doi.org/10.7301/Z0GH9G6G
